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What Atelier-L'Oréal Means for Niche Perfumery

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Atelier's niche market was attractive to L'Oreal, but how much expansion into niche is too much?

"For the first time, premium fragrances exceeded the growth in the mass segment, gaining close to 7% in 2015, compared to 5.​7% for mass," Euromonitor analyst Oru Mohiuddin wrote for Global Cosmetic Industry's June issue. "Investment in niche perfumery, personal­ization and exclusive collections are producing the desired impact as premium players increasingly seek to garner a piece of this lucrative market."

As a result, niche perfumery acquisitions are booming. Recently, Puig took a minority stake in EB Florals as part of its strategy to eventually capture 12% of the global selective perfumery market. That move aligned with other top multinat­ionals' investments in niche and prestige brands, including Shiseido's purchase of Serge Lutens and Estee Lauder's acquisition of Le Labo.

"Alternative perfumery is currently a high-growth segment."

Now, L'Oréal has announced its acquisition of Atelier Cologne, which was launched in 2009 by Sylvie Ganter and Christophe Cervasel, and specialises in niche perfumery sold in selected retailers.

Atelier Cologne's "colognes absolues" blend citrus notes with the other natural raw materials and are available in soaps, shower gels, body lotions and candles. 

The brand is sold in more than 800 points of sale in 40 countries and on e-commerce sites. It also has six standalone stores spread across France, the United States and Hong Kong.

"Our encounter and love story led to the creation of Atelier Cologne," said founders Sylvie Ganter and Christophe Cervasel. "Today, another dream comes true as we join the L'Oréal Group with a shared ambition to reach new heights keeping the entrepreneurial spirit of our Maison. We are delighted to benefit from the Group's retail and digital expertise and L'Oréal Luxe's olfactory expertise to make the brand even more successful."

"However, one must ask at some point in the near future, will niche remain niche, or will this category also become saturated?"

"Alternative perfumery is currently a high-growth segment," said Nicolas Hieronimus, president of L'Oréal Selective Divisions. "We are delighted to welcome the perfume House Atelier Cologne within L'Oréal Luxe. Thanks to its expertise in niche perfumery, this brand will perfectly complement the L'Oréal Luxe's brand portfolio which includes exclusive perfume collections from its biggest brands: Armani Privé, Le Vestiaire des parfums by Yves Saint Laurent, Maison Lancôme, Replica by Maison Margiela as well as the Ralph Lauren Collection."

As Hieronimus noted, the niche segment is "currently" growing. The question is: what could hinder that growth?

Two years ago, author Ruth Sutcliffe noted: "[Michael] Edwards’ data indicates that the niche category grew from 128 launches in 2003 to 395 in 2013. After a recent trip through the floors of Barneys and Bergdorf’s, I believe that we will see many more niche launches in 2014."

She was certainly right. Yet, Sutcliffe's closing note certainly sounds a note of caution: "However, one must ask at some point in the near future, will niche remain niche, or will this category also become saturated?"